Analysts see electric vehicles to remain policy focus in Malaysia’s automotive sector-Xinhua

A customer takes a test drive of an Ora Good Cat electric vehicle in Kuala Lumpur, Malaysia, Feb. 17, 2023. (Photo by Chong Voon Chung/Xinhua)

Malaysian government policies will continue to favor electrification of the auto sector, in line with the country’s decarbonization ambitions, analysts say.

KUALA LUMPUR, April 13 (Xinhua) — Analysts have foreseen electric vehicles (EVs) to remain policy focus in Malaysia’s automaker sector as the country aims to achieve its decarbonization goal.

MIDF Research said in its recent report that Malaysian government policies will continue to favor electrification of the auto sector, in line with decarbonization ambitions in the National Energy Transition Roadmap and Low Carbon Mobility Blueprint with a target of achieving 15 percent/38 percent xEV penetration by 2030/2040 and 10,000 charging points by 2025.

XEV includes battery EV (BEV), plug-in hybrid EV (PHEV), hybrid EV (HEV) and Fuel cell EV (FCEV).

According to the research house, at this juncture, a key policy to drive four-wheeler BEV demand is the 100 percent duty exemption for completely built units (CBU) BEVs up till 2025 and completely knock-down BEVs up till 2027.

However, it said the 100,000 ringgit (20,967 U.S. dollars) floor price imposed on CBU BEVs still poses a challenge for more aggressive adoption given Malaysia’s mass market price point of below 90,000 ringgit.

It is noted that in 2023, BEV penetration in Malaysia stood at just 1.3 percent.

An Ora Good Cat electric vehicle is displayed at a showroom in Kuala Lumpur, Malaysia, Feb. 17, 2023.(Photo by Chong Voon Chung/Xinhua)

In terms of charging infrastructure, Kenanga Research said the Malaysian government’s pledge to enable charge point operators (CPOs) to secure faster approvals for installation provides comfort as currently only more than 2,000 charging stations have been built.

According to the Malaysian Automotive Association (MAA), xEV sales jumped by 69 percent to over 38,000 units in 2023, accounting for approximately 5 percent of the TIV in Malaysia and showing a continued positive momentum for its demand.

This year the MAA believes that the xEV demand and interest will continue to grow on the back of government support to promote its use and with more new and exciting xEV models being introduced.